Mexico: money laundering scandals multiply

At an unusual joint press conference in Mexico City on July 19, the presidents of Mexico's governing center-right National Action Party (PAN) and the center-left Party of the Democratic Revolution (PRD) called on the federal Attorney General's Office (PGR) to investigate evidence of money laundering by the centrist Institutional Revolutionary Party (PRI). PAN president Gustavo Madero and PRD president Jesús Zambrano cited indications that during the campaign for the July 1 presidential and legislative elections PRI officials moved large sums of money through fake corporations and the Grupo Financiero Monex foreign exchange company in order to circumvent campaign finance restrictions. Madero said there was no implication that the money came from organized crime, but it may have been "stolen, from tax evasion, from companies, from the government, from state governments." (La Jornada, Mexico, July 20)

Jesús Murillo Karam, the PRI's legal representative for electoral matters, admitted on July 19 that the party had paid some workers through gift cards—a total of 7,851 cards worth 6,326,300 pesos (about US$465,335)—and he said the cards may have been funded through Monex. But the PRI dismissed allegations that it used millions of dollars' worth of gift cards for Organización Soriana, Mexico's second-largest retailer, to pay voters to mark their ballots for PRI candidates. (LJ, July 20)

The focus on Monex, which some Mexicans are starting to refer to as "Monexgate," comes amid investigations of widespread money laundering through Mexican exchange houses. On July 17 a US Senate subcommittee released a 330-page report on the failure of the London-based corporation HSBC, Europe's largest bank, to institute safeguards to prevent money laundering through some of its affiliates. The subcommittee said it had found that HSBC Mexico "transported $7 billion in physical US dollars to [HSBC Bank USA] from 2007 to 2008, outstripping other Mexican banks, even one twice its size, raising red flags that the volume of dollars included proceeds from illegal drug sales in the United States."

The bank also looked the other way when some bank accounts seemed suspicious. For example, HSBC saw no major risk in the accounts of Chinese-Mexican pharmaceutical entrepreneur Zhenli Ye Gon, who moved $90 million through the bank in the early and middle 2000s. The US indicted Ye Gon in 2007 for alleged involvement in the importation of methamphetamine; US prosecutors later dropped the charges, but an indictment Mexico filed against Ye Gon is still open. (LJ, July 18)

Ye Gon also had accounts at Monex. The Mexican government has found evidence of money being laundered through the firm by Mexican and Colombian drug cartels, including the Tijuana and Beltrán Leyva cartels, and Monex is one of the companies through which former PRI governor of Tamaulipas state Tomás Yarrington allegedly laundered $7.2 million. Yarrington was accused earlier this year of laundering money for the Los Zetas drug gang and the so-called Gulf Cartel. (Página 24, Aguascalientes, July 13) (The Mexican exchange house Monex apparently has no connection to a US firm with the same name.)

The United Nations Office on Drugs and Crime (UNODC) estimates that drug trafficking worldwide is worth some $320 billion a year. (UNODC press release, July 16) How much of this passes through the banking system is unclear, but in 2009 then-UNODC head Antonio Maria Costa told the British weekly newspaper The Observer he had seen evidence that the proceeds of organized crime were "the only liquid investment capital" available to some banks at the height of the 2008 world financial crisis. "Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities," Costa said. "There were signs that some banks were rescued that way." He declined to name the banks. (The Observer, Dec. 13, 2009)